Capital Strength Opportunity Portfolio, Series 4

Our goal with the Capital Strength Opportunity Portfolio is to choose well-capitalized companies with strong market positions. One important advantage that well-capitalized companies enjoy over others is that they have the potential to provide their stockholders with a greater degree of stability and performance over time.

Through our selection process,we seek to find companies with the following qualities:

  • Well-capitalized with strong balance sheets;
  • Skilled management;
  • High liquidity;
  • Ability to generate earnings growth; and
  • Record of financial strength and profit growth.

Portfolio Objective

This unit investment trust seeks above-average capital appreciation; however, there is no assurance the objective will be met.

Why Cash Matters

Companies with large cash positions tend to be mature companies that dominate their industries. A company with a significant amount of cash on its balance sheet is attractive for many reasons.Cash enables companies to bypass the credit markets and provides the means to:

  • Make strategic cash financed mergers and acquisitions;
  • Begin to pay dividends or increase dividend payments to boost returns;
  • Repurchase undervalued shares;
  • Reinvest cash to grow its business;
  • Improve its debt rating, thus reducing its cost of capital; and
  • Fund research and development projects, even in a down market.

Portfolio Selection Process

Through our selection process we seek to find the stocks that we believe have the best prospects for above-average total return.


Identify the Universe
The first step in our selection process is to identify the universe of stocks from which we will select the portfolio.We begin with the companies listed in the S&P 500 Index and eliminate those companies that do not meet our investment criteria.

Examine Historical Financial Results
The next step in our process is to look for those companies that have earned a net cash flow return on investment that is above the average of their peers.Historically, companies that have increased their cash flows at a higher rate have rewarded shareholders with superior total returns.

Select Companies with Attractive Valuations
The final step in our process is to select companies based on the fundamental analysis of our team of research analysts.The stocks selected for the portfolio are those that meet our investment objectives, trade at attractive valuations and, in our opinion, are likely to exceed market expectations of future cash flows.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value

You should consider the portfolio's investment objectives, risks, and charges and expenses carefully before investing. Contact your financial advisor or call First Trust Portfolios, L.P. at 1.800.621.1675 to request a prospectus, which contains this and other information about the portfolio. Read it carefully before you invest.

Risk Considerations:
An investment in this unmanaged unit investment trust should be made with an understanding of the risks involved with owning common stocks, such as an economic recession and the possible deterioration of either the financial condition of the issuers of the equity securities or the general condition of the stock market.

You should be aware that the portfolio is concentrated in stocks in the information technology sector which involves additional risks, including limited diversification. The companies engaged in the information technology sector are subject to fierce competition, high research and development costs, and their products and services may be subject to rapid obsolescence. Technology company stocks, especially those which are Internetrelated, may experience extreme price and volume fluctuations that are often unrelated to their operating performance.

An investment in a portfolio containing equity securities of foreign issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting foreign issuers.

Although this portfolio terminates in approximately 15 months, the strategy is long-term. Investors should consider their ability to pursue investing in successive portfolios, if available. There may be tax consequences unless units are purchased in an IRA or other qualified plan.

The value of the securities held by the trust may be subject to steep declines or increased volatility due to changes in performance or perception of the issuers.